A lot is happening with Meta Platforms (META) these days. Among key updates, Meta is slated to start showcasing ads on Threads, early next year. Meanwhile, the FTC (Federal Trade Commission) is set to challenge Meta in an antitrust court trial for its acquisition of Instagram and WhatsApp. The date for the trial has not yet been finalized. Let’s look at both the updates in detail.
Meta’s Threads to Showcase Ads
Meta’s text messaging platform Threads will start displaying advertisements in early 2025, The Information reported yesterday. One of the sources cited by the report said that a small team from Instagram’s advertising unit is working on the ads. To begin with, only a few marketers will produce and publish ads on Threads in January.
Although Threads does not have any monetization features currently, ads could turn into a good source of revenue generation in the future. Meta also keeps adding new features to Threads to attract more users. In October, Meta boasted 275 million active users. Threads was launched as a direct threat to Elon Musk’s X (then Twitter) in July last year. Meta has been successful in drawing users from X and might do so with advertisers too, as they have been skeptical of the harmful content showcased on X sometimes.
However, considering Musk’s close ties with President-elect Trump and his possible appointment as the head of the newly formed “Department of Government Efficiency,” there could be a wave of change for his companies, including X.
Antitrust Trial for Purchase of Insta and WhatsApp
Meta Platforms will soon face a trial in a U.S. FTC antitrust lawsuit, after trying to dodge the bullet in the 2020 case. Judge James Boasberg in Washinton ruled against Meta’s earlier motion to end the case yesterday. The FTC has alleged that Meta illegally thwarted competition in the social media space by overpaying and acquiring Instagram and WhatsApp in 2012 and 2014, respectively.
The FTC has asked for the break-up of Meta Platforms Family of Apps (FoA), citing its monopolistic position in the industry. The judge also ruled that Meta cannot argue that the acquisitions strengthened its competitive stance against Apple (AAPL) and Alphabet’s (GOOGL) Google.
Since the beginning, Meta has argued that the lawsuit did not consider existing competition from TikTok, YouTube, X, and Microsoft’s (MSFT) LinkedIn. Having said that, Meta is confident that it will be able to prove that these acquisitions only bolstered competition instead of harming and have also been good for consumers. This is one of the big tech cases where antitrust regulators are trying to investigate and break down the monopolistic power in the hands of a few large companies.
Is META a Good Buy Stock?
Wall Street is highly optimistic about Meta stock. On TipRanks, META stock has a Strong Buy consensus rating based on 41 Buys, three Holds, and one Sell rating. Also, the average Meta Platforms price target of $661.55 implies 14.1% upside potential from current levels. Year-to-date, META stock has gained 64.4%.
